IPS / Lighthouse Insurance Group Blog: obamacare

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Most of us are now aware that there is a tax penalty assessed if health insurance has not been purchased.

> The penalty in 2014 was the greater of 1% of the annual household income OR $95.00 per adult and $47.50 per child under 18 years old, subject to a maximum of $285.00.

> The penalty (or "fee" as it is called on the healthcare.gov website) for not purchasing health insurance in 2015 increases sharply to the greater of 2% of the annual household income OR $325.00 per adult and $162.50 per child under 18 years old, subject to a maximum of $975.00.

> The penalty for not purchasing health insurance will increase again in 2016 to the greater of 2.5% of the annual household income OR $695.00 per adult and $347.50 per child under 18. The Healthcare Marketplace Website (healthcare.gov) does not indicate any maximum cut-off for 2016.

> The penalty will continue to be adjusted for inflation in years after 2016.

In spite of the penalties or fees being assessed by the government for not purchasing health insurance, the cost of medical costs in the absence health insurance can be staggering.

While the Patient Protection and Affordable Care Act (also known as the "ACA" or "Obamacare") brought about some positive changes to our healthcare system, it has also stirred up some changes that are less than positive for many Americans.

Before the ACA took effect, approximately 86% of Americans were covered by some form of health insurance including individual or employer plans, Medicare, Medicaid, or a host of others. Of the remaining 14%, a certain number of people living in the US are not eligible for Obamacare. The primary goal of the new law was to make health insurance affordable and available to those who are uninsured and eligible - less than 10% of Americans. Of this eligible group, many were not insured because they couldn't afford health insurance and others were not insured because they simply did not want to purchase insurance.

Most Americans are now aware that the burden of making insurance affordable to this eligible but uninsured group of Americans has come at the expense of the 86% who were insured and happy with their insurance. There are also numerous hidden taxes that have and will be coming into effect to cover the cost of government subsidized health insurance and the broadened Medicaid program.

The first wave of major changes took effect on January 1, 2014. Individuals were mandated to purchase health insurance and the ACA specified the plans that had to be made available to individuals and families - either on the HealthCare.gov website or by going directly to insurance companies. Because of this, many insured on INDIVIDUAL health insurance plans found they were not able to keep the plan they had, and many insurance companies were forced to cancel all of their policyholders and offer completely new plans that met the new government requirements. Many who had been insured found their premiums to be higher AND that their out-of-pocket costs within the plan were much higher.

The second wave of major changes had been scheduled to take effect on January 1, 2015 - when the small business mandate was to take effect. This change may affect the largest group of people in the country - more than the group of individuals or those employed by large businesses. The effective date of this mandate has been pushed back until 2016 and many believe the primary reason was to avoid a new level of angst to Americans just prior to the mid-term elections.

Another thing that has been quietly changed behind the scenes is the open enrollment period to purchase health insurance for the 2015 calendar year. October 15 had been the date for open enrollment to begin but, with elections on November 4, the date has been pushed back until November 15, 2014. USA Today has an interesting article on this, titled "Obamacare is in Hiding Until After the Election". You may recall that, prior to 2014, a person could purchase health insurance at any time. With limited exception, Obamacare allows only a window of time that will run from November 15, 2014 to February 15, 2015 to purchase health insurance for the 2015 calendar year.

We're all hoping that the enrollment process will function more smoothly this year. If you have questions or need health insurance contact us online or call us at 800-220-5582.

As an independent insurance agency we strive to provide our clients with the solutions and plans to bring you low cost, innovative health insurance plans. We have recently added HealthPlus to our portfolio of insurance carriers. Whether you are an individual looking for your own coverage, an employer looking for coverage for employees or you are looking for a plan for your family HealthPlus can help. HealthPlus is consistently ranked among America’s best insurance carriers by providing exceptional service, unsurpassed clinical and service quality and has earned consistently high marks from the National Committee on Quality Assurance rating #1 in overall rating of health plans, doctors, specialists and the ability of providing care quickly. All HealthPlus Signature individual plans are health care reform compliant which includes essential health benefits with no medical underwriter or pre-existing condition exclusions. HealthPlus has always been the right plan for a healthier you and has had to make very few changes to plans and policies to comply with changing regulations. All plans are sold off the healthcare marketplace exchange to consumers through independent insurance agents.

Call Bobbie Ajamy at 1-800-220-5582 or contact us online with your health insurance questions or to get a quote.

While the PPACA (Patient Protection and Affordable Care Act, aka "Obamacare") has many positive attributes, the new law's complexity and countless rules are certain to cause a degree of angst to many employers. Remember, the PPACA law fills more than 2,700 pages and has various components that will phase in between the time it was passed in March, 2010 and 2020.

Many new responsibilities are placed on employers regardless of whether or not the business offers health insurance to its employees. One example is the requirement to provide a notice to employees by October 1, 2013 that provides information about the Health Insurance Marketplace Coverage Options. The Department of Labor has two sample forms that can be used, one for employers that do not offer health insurance, and the other for employers that do offer health insurance. The samples can be found in the Employee Security Benefits Administration' s section of the Department of Labor's website: http://www.dol.gov/ebsa/healthreform/.

Employers need to be diligent in learning all they can about the PPACA and how it affects their business. The law affects nearly all businesses - both for-profit and non-profit. There are even requirements for small businesses that fall below "50 full time equivalent" threshold that mandates an employer to offer "affordable" health insurance that meets "minimum value" standards to its "full time employees and their dependents". Businesses should consult their insurance professional, attorney and accountant to begin planning for 2014.

With respect to insurance, the PPACA may affect more than just the health insurance a business provides for its employees, such as Errors & Omissions (E&O), Employment Practices Liability (EPL), Employee Benefits Liability (EBL) and Directors' & Officers Liability (D&O). Now would be a good time to review these policies with your insurance professional to determine if coverage may need to be adjusted.

The professionals at INSURANCE PLANNING SERVICE are here to answer questions you may have regarding your health insurance or other lines of your business insurance. Contact us on the web or call us at 800-220-5582 today!

For the most part, Michigan finally dislodged itself from the on-again/off-again battle with winter in May. Spring reminds us of all the promises of the summer to come, and those unfinished to-dos we abandoned in the fall. Each May brings fleeting glimpses of beautiful ghosts from times and places long since gone. Scattered in massive clutches along country roads, flowering lilacs mark the corners where a home or farm once stood.

This spring, America is waking up and paying attention to things many had ignored. The specific details and impact of the 2010 health reform legislation will soon be felt by Joe Average, and the rhetoric of what the law will or will not do is becoming progressively irrelevant. People are nervous. Nervous people make nervous voters, and nervous voters make for nervous (and very testy) politicians. Reform is taking shape all around us and what actually occurs, not what was promised, is how America will judge the Affordable Care Act (ACA).

In a perfect world, rearranging 20 percent of the U.S. economy would be a massive and daunting task—incredible challenges, inevitable surprises, and political difficulties would be a given—yet, with the solid popular support of the people and thoughtful bipartisan cooperation, America could handle a challenge of such magnitude with a minimum of pain. We have none of that with the ACA.

The ACA is Supreme Court tested and, as the law of the land, it's moving forward at the fastest speed it can muster. Do not lose sight of this fact. As would be expected with any legislation this large, the sailing is anything but smooth. One key area where the law will progressively struggle is on the financial side. Any financial miscalculations or errors (something of a given with federal budgets) run straight into a purse tightly held by a cynical and fairly sour-minded Congress. The ACA was sold to America with firm assurances as to its total cost, and Congress clearly intends to hold Washington to its word.

Sensing Danger

In 1996, 53-year-old Michigan native Lou Kasischke set out to climb Mount Everest. Prior to his climb, Lou spoke to a large group of Blue Cross agents about the challenges he was training for. His training turned out to be a critical factor in the battle he would face for his life on Mount Everest. On that terrible day in May of 1996, eight climbers from his group perished on Everest. Lou shared the post-climb story of the tragedy with a second group of agents two years later, and it is a gripping one. This story was also told in great detail by Lou’s climbing companion, Jon Krakauer, in his famous book “Into Thin Air.”

Both climbers spoke of the incredible dangers and challenges they faced every moment on the mountain. When a sudden storm trapped them near the summit, Krakauer ended up lost in pitch blackness as night fell and temperatures plunged. Fearful he would freeze to death, he attempted to make his way to base camp by inching along the ice in total darkness. Part way down, he reflexively came to a sudden stop. Even though he could not see anything, he could “feel” a massive void in front of him and he didn't dare move. He survived the bitter night, and dawn confirmed that his instincts had saved his life. He was perched at the edge of an immense drop-off down the side of Everest, and certain death. The void he could only feel was, in fact, very real.

We all know that perception can be reality, but eventually reality will exert its rightful place. A CNN poll from May corroborates a long line of previous polls showing a lack of popular support for the ACA, with 54 percent of respondents opposing it. Politically speaking, this doesn’t generate soaring optimism. When it comes to the ACA, Americans are feeling a void, and time will soon tell whether this fear is justified or not.

The Messaging Onslaught

ACA proponents strongly contend that a lack of understanding is driving the poor public support. Funding to promote the law was not included in the legislation, and requests to Congress for additional monies for this purpose didn’t get far. This financial challenge has led the Department of Health and Human Services (HHS) to find private entities to promote the law, and to raise money for them.

HHS Secretary Kathleen Sebelius is both a cheerleader and fundraiser for Enroll America, whose purpose is to educate and sell Americans on the details of the ACA. Enroll America is a private organization launched by Families USA Executive Director Ron Pollack, and was approved as a nonpartisan 501(C)3 organization by the IRS in late 2011. (No, I don’t know if they received enhanced IRS scrutiny.) In early 2013, Anne Filipic left the White House Office of Public Engagement and replaced Pollack as its president. Enroll America’s Managing Director, Chris Wyant, directed the President’s 2012 election efforts, as head of eastern Ohio field operations. Impeccably connected politically, they also have a broad-based Board of Directors and an Advisory Board, which includes the National Association of Health Underwriters (NAHU).

A government official coordinating donations to a private entity, while concurrently quarterbacking that private entity's focus, is not a violation of any law. However, should donations be culled from those directly regulated by the same governmental entity, then there’s an issue. Discussing the “opportunity” to donate to a regulated organization creates the perception of a shakedown. Some are suggesting this is precisely what is happening now, and Congress is probing.

Raising money to fill gaps not addressed in the law is not a sign of strength. Efforts like this are likely to grow as more gaps are exposed, and Congress is not likely to suddenly warm to the idea of writing large checks beyond what the law requires.

Selling Reform to a Wary, and Frequently Weary, Public

The Democratic Steering and Policy Committee has developed an extensive guide for members to bone up on ACA talking points. Timelines, key information, sound bites and other analysis are all organized to give political leaders what they need to drive support and defend the ACA, but will politicians running for office actively support it? As more leaders of the reform effort speak up and call it a “train wreck,” or “beyond comprehension” (and then proceed to retire), legislators left behind are becoming progressively more worried. How will they react should large numbers of constituents speak out against the impact of the ACA?

Washington’s Credibility and Trust

Whether the issues with the IRS remain as low-level distractions or bloom into a full-blown scandal, it hurts the overall message. The public’s perception and trust in government institutions, like the IRS, is critical. The intimate role government plays handling confidential personal information and the sensitive functions they perform with the ACA, demand a high level of trust. Should the IRS appear to be less the impartial revenue collector and more a political operative, the challenges will grow enormously!

Will the messaging convince America that the ACA is a good thing? Not on its own. The rhetoric is becoming less effective, and actual consumer experiences will take center stage very soon. A smooth, surprise-free implementation is the only cure for the remarkably steady and negative polling numbers since the passage of the ACA. Provided that overall participation, functionality and “user experience” on the new marketplaces go well, and the rates are competitive, America will embrace the ACA. The spin from both sides about Armageddon or Rapture will be settled over the next few months!

Insurance Planning Service is a Trusted Choice agency. We can help answer the questions you have or help you find the right insurance for your home, auto, business, life or health. Contact us on the web or call us today at 800-220-5582.